#PublicProtector won't challenge Reserve Bank in court

Public Protector Busisiwe Mkhwebane will not mount a legal challenge to the application by SARB on her recommendations to curtail its powers. Picture: Reuters/Mike Hutchings

Johannesburg - The Public
Protector will not oppose a court challenge against her binding
proposal calling for a change to the mandate of the central
bank, her office said on Monday.

Busisiwe Mkhwebane recommended last month that the South African
Reserve Bank's (SARB) mandate of maintaining price and currency
stability be changed to focus on economic growth.

That set off a political row that has hit the rand and
government bonds and prompted court challenges from SARB
Governor Lesetja Kganyago, Finance Minister Malusi Gigaba and
Speaker of Parliament Baleka Mbete. They argue that Mkhwebane
had gone beyond the scope of her mandate.

The Public Protector's spokeswoman Cleopatra Mosana said on
Thursday that Mkhwebane had filed a notice opposing the
challenges to her recommendation. Mkhwebane said she was
empowered by the constitution to intervene in such affairs.

On Monday, however, her offices said Mkhwebane would no
longer be putting up a defence of her recommendation in court.

"Having considered the legal advice from the Senior Counsel,
which advice she accepted, the Public Protector, Advocate
Busisiwe Mkhwebane has decided not to oppose SARB’s review
application," Mkhwebane's office said in a statement.

The rand was unmoved by the news.

Analysts say it is unclear what prompted Mkhwebane's
recommendation. It will now be up to the courts to decide
whether her mandate extends to the central bank. The SARB has
requested for a hearing of the case in August.

The ruling African National Congress has stated that it is
opposed to altering the mandate the central bank.

But its ally Cosatu, the country's biggest union, has backed
calls for changes saying the bank is not acting in the interests
of South Africa's poor majority.

Mkhwebane made the proposal to change the bank's mandate
when she delivered her findings on an apartheid-era bailout of a
bank that was subsequently bought by Absa, now a unit of
Barclays Africa Group.